As fuel prices rise, environmental concerns grow, and consumers feel less wealthy in the faltering global economy, the benefits of small cars with fuel-efficient engines are coming to the fore. Add growing concerns over urban congestion and the pressure intensifies to switch to smaller cars. In parallel, several vehicle manufactures have announced intent to expand their offerings of small battery-powered electric vehicles. In context of these trends, how are the car companies reacting and what are the projections for the small car market in the years ahead? Are we really seeing a sea change? Or merely local wind shifts?
Inevitably, longstanding regional differences tend to distort the overall global picture. Japan, for example, has a long history of small or microcars, known as the kei segment. This is essentially a tax-driven market sector which gives favorable treatment to cars with engines of 660 cc capacity or smaller.The US market, by contrast, has long been the home of gas-guzzlers, underpinned by American lifestyle preferences and much lower fuel prices than in Europe, in particular. Europe, in contrast to the USA, has always had a strong mini segment, led by Fiat and the French vehicle companies. What is notable in recent years has been the emergence of smaller cars across all brands – BMW and Mercedes moved into the Golf-sized C segment some time ago, but they will also be offering even smaller vehicles in the years ahead.